|
 |
|
|
|||
|
 |
|
Aug. 18, 2010 Source: BHP Billiton news release BHP Billiton (ASX:BHP/LSE:BLT/NYSE:BHP and BBL/JSE:BIL) today announced its intention to make an all-cash offer to acquire all of the issued and outstanding common shares of Potash Corporation of Saskatchewan Inc. ("PotashCorp") (NYSE:POT/TSX:POT), at a price of US$130 in cash per PotashCorp common share (the "Offer"). The Offer values the total equity of PotashCorp at approximately US$40 billion on a fully-diluted basis. The acquisition will accelerate BHP Billiton's entry into the fertilizer industry and is consistent with the company's strategy of becoming a leading global miner of potash. PotashCorp's potash mining operations are a natural fit with BHP Billiton's greenfield land holdings in Saskatchewan, Canada. Compelling Offer to PotashCorp Shareholders The Offer represents an attractive premium of 20 per cent to the closing price of PotashCorp's shares on the NYSE on 11 August 2010, the day prior to BHP Billiton's first approach to PotashCorp. It is also a premium of 32 per cent and 33 per cent to the volume weighted average trading prices of PotashCorp's shares on the NYSE for the 30-trading day and the 60-trading day periods ended on the same date, respectively. The Offer is fully funded and provides PotashCorp shareholders with immediate liquidity and certainty of value regarding the company's growth potential in the face of volatile equity markets. On 12 August 2010, BHP Billiton Chief Executive Officer Marius Kloppers made a proposal to PotashCorp's President and Chief Executive Officer, William J. Doyle, to combine the two companies in which PotashCorp shareholders would receive US$130 in cash per PotashCorp common share. Kloppers was advised by Doyle that PotashCorp was not for sale and had no interest in discussing a combination at this time. Subsequently, on 13 August 2010, BHP Billiton Chairman Jac Nasser reiterated the proposal in a letter to Dallas J. Howe, the PotashCorp Board Chair, requesting a response from the PotashCorp Board by 18 August 2010. On 17 August 2010, Howe advised Nasser by letter that the Board of Directors of PotashCorp unanimously rejected BHP Billiton's proposal, and PotashCorp made BHP Billiton's proposal and PotashCorp's response publicly available. Notwithstanding PotashCorp's current position, BHP Billiton would welcome the opportunity to work with PotashCorp to achieve a successful outcome to this transaction. Commenting on the Offer, Nasser said "We firmly believe that PotashCorp shareholders will find the certainty of a cash offer, at a premium of 32 per cent to the 30-trading day period average, very attractive and we have therefore decided to make this Offer directly to those shareholders". Consistent with BHP Billiton's Strategy The acquisition of PotashCorp is consistent with BHP Billiton's strategy of developing, owning and operating a diversified portfolio of large, low-cost, long-life, expandable, export-oriented, Tier 1 assets. PotashCorp will provide BHP Billiton with an immediate leadership platform in the global fertilizer industry and further diversify BHP Billiton's portfolio of Tier 1 assets. In addition, the acquisition leverages BHP Billiton's global capability and experience in building, operating and expanding mining operations. Furthermore, BHP Billiton believes that the proposed acquisition will be earnings per share accretive in the second full fiscal year following consolidation. Commenting further on the Offer, Kloppers said "This is an exciting opportunity to acquire a portfolio of Tier 1 assets. It accelerates our stated strategy of becoming a leading global potash producer and further diversifies our portfolio by commodity, geography and customer." Benefits to Canada BHP Billiton is committed to being a strong corporate citizen in Saskatchewan, New Brunswick and Canada and, in that regard, is prepared to make appropriate undertakings as part of its submission to Investment Canada. Amongst these is BHP Billiton's intention to establish a global potash business in Canada and to base the President and management of the Canadian potash operations in Saskatchewan. BHP Billiton plans to maintain current levels of employment at PotashCorp's Saskatchewan and New Brunswick operations for the foreseeable future. BHP Billiton also intends to identify and propose a Canadian nominee to stand for election to the BHP Billiton Board. BHP Billiton recognizes the significant and unique capabilities of PotashCorp's businesses and its employees and is firmly committed to ensuring that PotashCorp's businesses continue to play leading roles in the global fertilizer industry. Towards this end, BHP Billiton intends to continue PotashCorp's planned and previously announced capital programs. In addition, BHP Billiton will continue to progress its plans to develop its Jansen greenfield potash project. BHP Billiton is committed to strong community relations and intends to bring PotashCorp's spending commitments on community programs in line with BHP Billiton's global commitment levels. BHP Billiton's policy is to spend 1 per cent of Profit Before Tax, on a 3 year rolling average basis, on community programs. BHP Billiton has had business interests in Canada for almost 40 years, the most significant of which has been EKATI in the Northwest Territories - one of the world's premier diamond mines. BHP Billiton has invested approximately US$5 billion in Canada since EKATI began production in 1998. In recent years, BHP Billiton has acquired exploration rights in the Saskatchewan potash basin. About the Offer BHP Billiton plans to formally commence its Offer by way of newspaper advertisement on 20 August 2010. The Offer will be open for acceptance until 11:59 p.m. (EDT) on 19 October 2010, unless the Offer is extended at the sole discretion of BHP Billiton. The Offer will be subject to certain conditions, including, without limitation, that the PotashCorp shares tendered under the Offer, together with any PotashCorp shares owned by BHP Billiton upon expiry of the Offer, constitute more than 50 per cent of the shares of PotashCorp then outstanding, on a fully-diluted basis. The Offer will also be conditional upon the recently-adopted PotashCorp shareholder rights plan being terminated or determined to be ineffective, receipt of all necessary regulatory approvals, no material adverse change in PotashCorp and other conditions customary for transactions of this nature. The Offer is not subject to any financing condition or BHP Billiton shareholder approval. Full details of the Offer will be included in the formal offer and take-over bid circular to be publicly filed and subsequently mailed to PotashCorp's shareholders. BHP Billiton is requesting a list of PotashCorp's shareholders and expects to mail the formal offer and take-over bid circular to PotashCorp's shareholders as soon as possible following receipt of the shareholder list. Transaction Financing BHP Billiton estimates the total amount of funds required to consummate the Offer is approximately US$43 billion (including funds required to repay or refinance certain existing PotashCorp indebtedness if necessary). BHP Billiton has arranged a new multi-currency term and revolving facility agreement entered into for the purpose, among other things, of meeting the funding requirements of the transaction. The terms of the facility will include various representations and warranties, affirmative and negative covenants, and events of default customary for credit facilities of this type. The acquisition financing facility will preserve BHP Billiton's financial flexibility. BHP Billiton remains committed to maintaining a solid A credit rating and a progressive dividend policy. About BHP Billiton BHP Billiton is the world's largest diversified natural resources company with approximately 41,000 employees working in more than 100 operations in 25 countries. BHP Billiton has significant positions in major commodity businesses, including aluminum, energy coal and metallurgical coal, copper, manganese, iron ore, uranium, nickel, silver and titanium minerals, and has substantial interests in oil, gas, liquefied natural gas and diamonds. Tweet |
|
|
|
|
|
|
|
|
|||||||||||||
